Brocade Rises the Most in Two Years as Profit Tops Estimates
Brocade Communications Systems Inc. (BRCD) rose the most in more than two years after the maker of switches for data-storage networks reported fourth-quarter profit that beat analysts’ estimates.
Brocade, based in San Jose, California, rose 13 percent to $5.07 at the close in New York, the biggest gain since Oct. 5, 2009. The stock has dropped 4.2 percent this year.
Profit excluding certain items rose to 16 cents a share for the period ended Oct. 29, the company said in a statement yesterday. Analysts had projected 10 cents on average, according to data compiled by Bloomberg.
Record revenue for its Ethernet business and fast adoption of its 16 gigabit-per-second Fibre Channel products, or components of storage-area networks, aided Brocade in the quarter, Michael Klayko, the company’s chief executive officer, said in the statement.
“This quarter storage bounced back. They put up a pretty nice number for Ethernet, despite a partner purchasing its competitor,” said Matt Bryson, an analyst at Avian Securities LLC in Boston, referring to Dell Inc. (DELL)’s July acquisition of Force10 Networks Inc. “Investors worried the deal could create headwinds for Brocade,” said Bryson, who rates Brocade “neutral.”
Brocade recorded a net loss of $4.3 million, or 1 cent a share, compared with net income of $22.2 million, or 5 cents a share a year earlier.
Fourth-quarter revenue rose to $550 million. The company said it expects revenue in a range of $530 million to $550 million in its fiscal first quarter. That compares to estimates of $541 million from analysts in a Bloomberg survey.
To contact the reporter on this story: Xu Wang in New York at xwang206@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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